NCPA - National Center for Policy Analysis


September 23, 2009

States have already shown that curbing junk lawsuits can cut costs, create jobs and increase the quality of care available to patients.  This is exactly what happened in Missouri, says Matt Blunt (R), a former governor who helped enact comprehensive reforms in the Show Me State.

Blunt took office in January 2005 at a time when runaway lawsuits were driving up the cost of doing business in the state and forcing doctors and other business owners to close their doors:

  • At that time, Missouri ranked among the 10 worst states according to legal environment.
  • "Venue-shopping," a tactic that involves shifting a case to a friendly court regardless of where the injury occurred, was common.
  • Defendants could be made to pay 100 percent of a judgment even if they were only 1 percent responsible for the injury; and caps on damages had been rendered meaningless by state court decisions.

This legal environment raised the cost of health care for everyone and imposed stiff costs on businesses.  It also forced doctors to close their doors, says Blunt.

To counteract these problems, the state:

  • Required that cases be heard in the county where the alleged injury occurred, and it changed the law so that defendants could only be forced to pay a full judgment if their fault exceeded 50 percent.
  • Put a $350,000 cap on noneconomic damages and created rules to prevent baseless cases from getting off of the ground; previously, personal injury lawyers could file cases if they got a written affidavit from any qualified health care provider claiming that there was negligence.

Tort reform works, says Blunt:

  • Missouri's medical malpractice claims are now at a 30-year low.
  • Average payouts are about $50,000 below the 2005 average.
  • Malpractice insurers are also turning a profit for the fifth year in a row -- allowing other insurers to compete for business in Missouri; this will drive down costs, which will save government programs money as well as improve the system for patients and it will also leave doctors with more resources to invest in better care.

Source: Matt Blunt, "How Missouri Cut Junk Lawsuits," Wall Street Journal, September 22, 2009.

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